Commission continues to tackle budget

Commission may approve it Tuesday

Over three days of meetings and several questions later, the Alamogordo's City Commission is about halfway complete in adopting a preliminary budget for the upcoming 2014-15 fiscal year.

While the final budget to the New Mexico Department of Finance Administration is not due until June 30, the city has to submit their preliminary budget by June 1.

City Manager, Jim Stahle, told the commission to look at the big picture when it comes to the budget.

He told the commission that the upcoming fiscal year budget was a maintenance budget that includes no additions or cuts to services and personnel — and no raises.

Overall the city is looking to work with an estimated $42,023,299 budget for the next fiscal year. Compared to last year, city staff predicts there will be a four percent decrease in revenue and a 29.1 percent decrease in expenditures. The city is expecting to see a 0.73 increase in Gross Receipts Tax every year for the next five years.

Health Care

Health insurance premium rates were increased by 15 percent in the 2013-14 fiscal year and there will be another 10 percent increase this year — about a $120,000 cost increase. The city pays 60 percent for health, dental and administration fees. Employees fully pay for disability, vision and supplemental life insurance.

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One issue that had commissioners scratching their heads was to decide how much the city should contribute to employees and their dependents when the Affordable Healthcare Act kicks in January. The city presented commissioners with 19 different options that showed how much the city would contribute to individual employees and their families. Staff is recommending the city pays 85 percent of individual employee's insurance and 35 percent for dependents with an assumption that 248 employees are getting their insurance through the city. Annually, this option would result in $248,039 increase for the city, a $1,423 decrease for an individual employees and a $1,344 increase for families.

While some commissioners reviewed this option and suggested selecting a different option, no commissioner has brought any instruction to city staff to change this option.

Water

Customer Service Manager with the city, Armando Ortega, presented the city's proposal for water rate increases for the next two fiscal years. He said by increasing the rates the city will be better able to cover present and future operational expenses. The city is proposing a two percent increase in water base for all water meter sizes for both residential and commercial consumers.

According to city documents, the city estimates it could generate more than $150,000 if rates are increased in the upcoming fiscal year — $51,509 from its water base and another $100,000 from water commodity rate increases.

The city also proposed adding a one dollar capital replacement surcharge to every water bill. The commission will be presented with that ordinance at the next commission meeting on Tuesday. The surcharge could be used for capital projects such as the La Luz Water Filter Plan and the Alamo Canyon Water Filter Plant.

"The intent is to start developing a fund where we don't have to borrow money every time we want to do anything to improve the plant or replace lines," Stahle said. "It also means a lot when you go get it (a loan) — if you have an extraordinary expense, and you have to go to a bank or bonding institution — if you have cash on hand, it lessens the amount borrowed, it lessens the amount of interest you pay and, of course, it helps your rate because your rate can then be lowered as well."

Ortega said it was up to the commission on how they want to implement the surcharge but recommended the one dollar surcharge. He said the increase could also be changed if the commission decided to do so.

More Meetings

On Friday, Stahle said that none of the commissioners have yet to bring any changes to the city's preliminary budget. Commissioners will have to bring their changes by Tuesday before the budget is adopted. The commission is scheduled to adopt the budget at Tuesday's regular commission meeting after it's final budget workshop session.

City staff will continue it's workshop with the commission at 3 p.m. Monday and Tuesday at Fire Station No. 5 to cover more issues related to the budget.